Chaturvedi panel report may not be fully implemented

New Delhi, Aug 13 (IANS) The government may find it difficult to implement the recommendations of the B.K. Chaturvedi Committee on fuel pricing, Petroleum Minister Murli Deora said here Wednesday. A meeting of heads of state-owned oil companies will be held next week to discuss the recommendations.

“The recommendations are being studied and are under consideration of the government,” said Deora, adding, “I am told some recommendations of the committee can be implemented, while others could be difficult to implement.”

The high-powered committee chaired by Chaturvedi, a former cabinet secretary, last week submitted its report on fuel pricing to Prime Minister Manmohan Singh.

The contents have not yet been made public, but it has reportedly suggested monthly revisions of petrol and diesel prices.

The report has recommended a monthly increase of Rs.2.50 for petrol to bring it to market rates by March 2009, while diesel has a slower trajectory of 75 paisa.

Besides, it has suggested that retail pricing should be on the basis of export parity, instead of trade parity, as is currently being followed now.

The minister said while some preliminary discussions had taken place Tuesday, a more “thorough analysis” was required to arrive at any decision.

“Next Tuesday, I have called a meeting of oil PSU (public sector uit) chiefs to discuss the recommendations,” he said.

Besides, the three-member committee has also recommended a “metro extra” tax on diesel in large cities, where it is being used in large cars.

The minister also ruled out any downward revision of fuel price because of declining global crude prices.

Oil prices had reached record high of $147 a barrel July 11, but within a month, fell to below $113 a barrel Wednesday.

In India, retail prices are pegged at $68 a barrel, much lower than the average Indian crude basket of nearly $110 a barrel.

“Our retail prices are pegged much lower. There is no scope for reduction in petrol and diesel prices as of now,” said Deora.

While consumers may not get any relief, the oil marketing companies will have a slightly lower loss, compared to that calculated in June.

With global oil prices going down, the petroleum ministry is now likely to ask the finance ministry to revise its demand of oil bonds worth Rs.1,500 billion to Rs.1,250 billion to plug the gap of under-recovery from sale of petroleum products at subsidised rates.